The quality ratings assigned to bonds reflect the:
A. probabilities of different returns on their sinking fund investments.
B. probabilities of their maturity value becoming lower than the principal value.
C. probabilities of their being recalled by the exercise of a call provision.
D. probability of their face value increasing to above their market value.
E. probabilities of their going into default.
Option e is correct option because bond ratings are given by
rating agencies by taking into consideration on probability of
default, debt levels,etc.
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The quality ratings assigned to bonds reflect the: A. probabilities of different returns on their sinking...
Bonds are assigned ratings that reflect Question 7 options: The value of the rate of return The risk/return ratio The probability of going into default Restrictive covenants
1st blank options = par value, coupon payment, price
2nd blank options = bankruptcy, default, liquidation
3rd blank options = convertible provision, sinking fund
provision, call provision
4th blank options= call provision, call premium,
convertibility provision
5th blank options = floating-rate, fixed-rate
6th blank options = indenture, trustee, debenture
7th = multiple choice
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